Alibaba Cloud : #1 Market Share Cloud Provider in China 2022

Alibaba Cloud, Huawei Cloud, Tencent Cloud, and Baidu AI Cloud were the top four cloud vendors in Mainland China in 2022, collectively accounting for a combined 79% share of customer spending. Although telcos are seeking to capture cloud market share by introducing their own cloud services, the competitive pressure on the top four vendors is expected to increase further, especially in the government and public sectors. However, a gap still exists in the platform and software capability offerings of telcos that needs to be closed before they can become strong players in cloud infrastructure services.

According Analyst Yi Zhang, 23% of the overall China cloud services market is expected to be represented by platform-as-a-service in 2022. Cloud services requirements from enterprise customers have become more complex, with many demanding customizations. Therefore, the focus has shifted from simply providing cloud infrastructure to providing comprehensive cloud platform and software capabilities. The share of PaaS is expected to increase in 2023 as China’s top cloud vendors announce investments in recruiting vertical-focused partners to provide PaaS solutions to customers. Despite experiencing a tough year with slower growth rates quarter-on-quarter after a strong 2021, Alibaba Cloud maintained its position as the top cloud vendor in Mainland China in 2022, with 36% of total customer spending in cloud infrastructure services after growing 7% YoY. The revenue contraction from Alibaba’s internet-based customers, which was its strongest business segment, is expected to diminish in 2023. Cloud demand from internet-based customers is expected to rebound as the economy restabilizes after pandemic restrictions are lifted. Having survived a data security attack, Alibaba Cloud is actively seeking opportunities for customer expansion in government and public sectors. In addition, Alibaba Cloud is making steady progress in its overseas expansion, announcing the opening of its third data center in Japan in Q1 2023. It launched six new data centers in 2022, spanning three continents in Asia Pacific, the Middle East, and Europe.